Audi 2008 Annual Report Download - page 149

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Stockholders’ rights and obligations
Stockholders enjoy property and administrative rights.
The property rights include, above all, the right to a share in the profit (Section 58, Para. 4 of
the German Stock Corporation Act [AktG]) and in the proceeds of liquidation (Section 271 of the
German Stock Corporation Act), as well as a subscription right to shares in the event of capital
increases (Section 186 of the German Stock Corporation Act).
The administrative rights include the right to participate in the Annual General Meeting and the
right to speak, ask questions, table motions and exercise voting rights there. Stockholders may
assert these rights, in particular, by means of a disclosure and avoidance action.
Each share carries an entitlement to one vote at the Annual General Meeting. The Annual Gen-
eral Meeting elects the members of the Supervisory Board to be appointed by it, as well as the
auditors; it decides, in particular, on the ratification of the acts of members of the Board of
Management and Supervisory Board, on amendments to the Articles of Incorporation and By-
laws, as well as on capital measures, on authorizations to acquire treasury shares and, if neces-
sary, on the conduct of a special audit, the dismissal of members of the Supervisory Board
within their term of office and on liquidation of the Company.
The Annual General Meeting normally adopts resolutions by a simple majority of votes cast,
unless a qualified majority is specified by statute. A control and profit transfer agreement exists
between AUDI AG and Volkswagen AG (Wolfsburg) as the controlling company. This agreement
permits Volkswagen AG to issue instructions. The net profit of AUDI AG available for distribution
is transferred to Volkswagen AG. Volkswagen AG is obliged to make good any loss. All Audi
stockholders (with the exception of Volkswagen AG) receive a compensatory payment in lieu of
a dividend. The amount of the compensatory payment corresponds to the dividend distributed
in the same fiscal year to Volkswagen AG stockholders for each Volkswagen ordinary share.
Capital interests exceeding 10 percent of the voting rights
Volkswagen AG (Wolfsburg) holds around 99.55 percent of the voting rights in AUDI AG. For
details of the voting rights held in Volkswagen AG, please refer to the Management Report of
Volkswagen AG.
Composition of the Supervisory Board
The Supervisory Board comprises 20 members. Half of them are representatives of the stock-
holders, elected by the Annual General Meeting; the other half are employee representatives
elected by the employees in accordance with the German Codetermination Act. A total of seven
of these employee representatives are employees of the Company; the remaining three Supervi-
sory Board members are representatives of the unions. The Chairman of the Supervisory Board,
a stockholder representative elected by the members of the Supervisory Board, ultimately has
two votes on the Supervisory Board in the event of a tie vote, pursuant to Section 13, Para. 3 of
the Articles of Incorporation and Bylaws.
Statutory requirements and provisions under the Articles of Incorporation and
Bylaws on the appointment and dismissal of members of the Board of Management
and on the amendment of the Articles of Incorporation and Bylaws
The appointment and dismissal of members of the Board of Management are stipulated in Sec-
tions 84 and 85 of the German Stock Corporation Act. Members of the Board of Management
are accordingly appointed by the Supervisory Board for a period of no more than five years.
Reappointment or an extension of the term of office, in each case for no more than five years,
is permitted. Section 6 of the Articles of Incorporation and Bylaws further stipulates that the
number of members of the Board of Management is to be determined by the Supervisory Board
and that the Board of Management must comprise at least two persons. Section 9, Para. 3 of
the Articles of Incorporation and Bylaws stipulates that the term of office for a Supervisory
Board member elected to replace a Supervisory Board member who has not fulfilled his term of
office ends upon expiry of the term of office of the Supervisory Board member leaving.